Market Research, Analysis and Opinion.

Annaly Capital: A must read

2017-03-03T11:36:00.002-05:00

I have been holding Annaly Capital (NYSE:NLY) for years. I have analyzed the name from many different angles over the years, but at the end of the day this is an income name, plain and simple. As an income play, one of the strong positives in this name is that the stock has mostly traded sideways in recent quarters. What this means is that you are relying on the dividend payout, and that is the crux of today's piece.

While there is pressure to constantly follow the ups and downs in your holdings day to day, I contend that investors should take a longer-term approach. Higher rates bode well for the mREITs, but in the short term, rate movements could introduce volatility. Stay the course, and don't worry about the day to day. From a longer-term perspective, what we need to be concerned with are total returns and dividend coverage.

First, we should discuss.......READ MORE

Frontier Communications is a mess

2017-03-03T11:35:00.002-05:00

Frontier Communications Corporation (NASDAQ:FTR) has been a stock that I have been following for a while. Now, for a long time, I had worries over the company's dividend, and sure enough, it had been cut over time. Back in the fall I told you plainly that the loss of customers was unsustainable. However, it has managed to keep the payouts going. Some claim it's unsustainable, but my prior work has shown nothing to indicate a truly imminent cut. Frontier has delivered. The stock, however, has been a mess and has imploded once again after reporting earnings, which I would like to discuss.

The fact is that performance has been slowly declining for the company so there is truly cause for concern, not just short-term, which the stock clearly suggests, but also long-term. It is tough to understand where the company is going and so caution must be exercised. The name is very risky here. We cannot compare this quarter to those past directly as we are now past the Verizon (NYSE:VZ) asset acquisition. Now, I will be clear. The dividend is safe, for now. The company just declared a $0.105 per share payout, in line with previous. I see the dividend as secure so long as revenues aren't expected to drop off significantly. They have been pressured of course, driven by customer churn and the stock has responded by dropping in tandem with customers.

The customer count is impacting things. However, given the acquisitions made, you wouldn't......READ MORE

Endeavour Silver Falls Apart

2017-03-03T11:34:00.001-05:00

Endeavour Silver (NYSE:EXK) is about to get crushed. This is a name that I recommended profit taking on last spring but is a name that I have wrestled with for some time, but have maintained a buy rating on pullbacks. The stock, along with many in the sector experienced a meteoric rise in 2016. I was really surprised at first when the company decided to slash production entering 2016; however, upon further consideration, I concluded the long-term survival of the company took precedence and so saving cash was key. Still, there are concerns over performance and the stock is about to implode today on the back of the just reported Q4.

In this column will discuss the production and finances, as well as the outlook for the name to shed light on why the stock is getting smashed. Metals have retracted a bit at the end of 2016 and into 2017. Now, I had no real expectations for output, and truthfully the production numbers disappointed me because they came in below the company's planned production. Endeavour churned out silver production that was down year over year at 1,088,845 million ounces for Q4 2016. That, of course, is a 37% decline from last year. While this was planned, it is still an 'ouch' moment. Gold production came in at 11,402 ounces, a whopping 26% decrease year over year. Using a 75:1 ratio for silver to gold, it is important to note that for the quarter, silver equivalent production was 1.9 million ounces. Of course, this is down from last year in line with guidance. Metals sold were down heavily as well, with just 946,546 ounces of silver and 11,004 ounces of gold sold, dropping 44% and 28%, respectively.

Now I have to tell you that........READ MORE

AT&T is mindblowing

2017-03-03T11:33:00.002-05:00

One of my key holdings is AT&T (NYSE:T), and it's a name which I have discussed in many articles. Overall, the share price had been very stable, it was reliable for income, but growth kicked in last year, and shares have spiked from the low 30s to the 40s in a year. Then, the proposed deal with Time Warner (NYSE:TWX) sent shares down close to 20%, giving a buying opportunity. Shares have recouped most of those losses now. While I love the growth, I am in this name not for growth, but the incredible strength of the company's growing dividend payments over time. Still, with all of the action in the name, the company really is the new AT&T, and news today continues to signify that.

But what exactly do I mean by the new AT&T? Well, if you have not been following my work, I am talking about innovation. I have covered the path to innovation over the course of many articles as I have developed this thesis. The company has quite simply fundamentally changed in the last three to five years. For AT&T, this much innovation in such a short period of time has been unprecedented. There are a number of purchases it has made, as well as experiments with social media, its Hello Lab project, and many others. The best move for growth has been the company's push to integrate its DirecTV content with mobile. I would be remiss if I didn't also at least mention that the company working to be first on 5G technology, in addition to pumping hundreds of millions of dollars into its infrastructure. AT&T is now a global telecommunications and media company, rather than just a simple "phone" company. And that takes me to today, where we learned that......READ MORE

AT&T And The Mountain Debt

2016-02-21T14:45:00.001-05:00

As many of my followers know I have been covering AT&T (NYSE:T) heavily of late because I continue to establish the thesis that the company is changing. How? Well, one word - innovation. I argue that this is no longer the second-rate phone company it was once known as. I contend that moving forward that the stock will cease to trade sideways while paying its nice dividend, because the company is changing its approach. Look I love the dividend. I love the stability of the stock. But what I love even more is a company that is able to increase its payout to shareholders and provide growth as well. This path to innovation and the crux of my thesis centers on the unprecedented push to integrate its DirecTV content with mobile. If you have not looked into the service in a while, it is offering the best new customer deals I have seen in years. The company is also looking to take the lead in the sector and be first on 5g technology. I invite you to review these pieces and to read more on the story of innovation that I am telling. The bottom line is that AT&T is serious about being a leader as the 21st century progresses. However, there remains one key bottleneck to the company andthe stock's success. I am talking about the debt. Strike that. I am talking about the mountain of debt.

I have cited many times previously in prior articles that the large amount of debt is a risk for AT&T. The debt is keeping management from raising its dividend by more than a penny each year. The debt keeps a lid on research and development expenses. The debt also keeps many would be investors out of the name. I am on record as saying that the company must prioritize reducing its debt and protecting its ratings. That said, the company has taken yet another step in the right direction.

In a somewhat quiet and under-covered story in my opinion, the company today began exchange offers of 16 series of its DirecTV notes for AT&T notes. We are talking about a credit positive move on the order of $17 billion. Now I will admit, I am certainly not an expert in debt restructuring, but the news sounded very positive. You can read specifically about the notes being exchanged here. The details of the exchanges, while important, are beyond the scope of this article and would really be a regurgitation of the facts. But I will say that each AT&T note issued in exchange for a DirecTV note will have an interest rate and maturity that is identical to the interest rate and maturity of the tendered DirecTV note, as well as identical interest payment dates and optional redemption prices. No accrued but unpaid interest will be paid on the DirecTV notes in connection with the exchange offers. However, interest on the applicable AT&T Note will accrue from and including the most recent interest payment date of the tendered DirecTV note. In other words, the move isn't really costing the company, other than interest on the AT&T note. So why is this move a positive?

To answer this question I turn to expert commentary from Moody's, who specializes in debt and debt ratings. They discussed the move. There is one key point in Moody's note that I want to focus in on. They stated:

"The exchange offer has the potential to greatly reduce in the degree of structural subordination of debt at AT&T Inc. If a large majority of debt is tendered, the exchange will reduce the amount of debt structurally senior to unsecured creditors of AT&T Inc. from $37billion (26% of total, including device securitization and Mobility II preferred equity) to around $20 billion (15% of total)."

What this means for shareholders is that without such a move, the amount of debt as stands today in its current format would pressure AT&T's unsecured ratings. This means, that the move is helping stave off a potential credit downgrade. That is a key piece of positive news. A downgrade means increased costs of borrowing and of course unsettles investors. Any DirecTV debt that is exchanged for AT&T notes will be rated at Baa1, which is in line with current ratings. All in all, if a large degree of debt is moved in this manner, it will reduce the amount of debt structurally senior to unsecured AT&T creditors from $37 billion to around $20 billion, yielding the $17 billion figure I mentioned above.

Bottom line here? The move saves money. It makes the debt "cheaper" for lack of a better term and protects the rating of the debt. Since the debt is among the largest concerns of shareholders, I felt it prudent to cover this piece. Now I want to turn it over to you? What do you think about the move? Will DirecTV debt holders bite? Do you agree lowering costs long-term makes the debt more manageable? Let the community know below.

Invensense earnings. Some positives and some negatives.

2015-05-05T13:58:00.002-04:00

It wasn't the best and it wasn't the worst. InvenSense, Inc. (NYSE: INVN) the leading provider of intelligent sensor system on chip (SoC) for Motion and Sound, today announced results for its fourth quarter and fiscal year ended March 29, 2015.

Net revenue for the fourth quarter of fiscal 2015 was $99.3 million, down 14 percent from $115.9 million for the third quarter of fiscal 2015, and up 68 percent from $59.0 million for the fourth quarter of fiscal 2014.

Gross margin determined in accordance with U.S. generally accepted accounting principles (GAAP) was 43 percent for the fourth quarter of fiscal 2015, consistent with the third quarter of fiscal 2015. GAAP gross margin for fourth quarter of fiscal 2015 included stock-based compensation and related payroll taxes, and amortization of acquisition intangibles. Excluding these items, non-GAAP gross margin was 46 percent for the fourth quarter of fiscal 2015, consistent with the third quarter of fiscal 2015.

GAAP net income for the fourth quarter of fiscal 2015 was $0.4 million, or zero cents per diluted share. By comparison, GAAP net income was $10.2 million, or 11 cents per diluted share for the third quarter of fiscal 2015. GAAP net income for the fourth quarter of fiscal 2015 included stock-based compensation and related payroll taxes, accreting interest expense on convertible notes, amortization of acquisition intangibles, business acquisition costs, certain legal expenses and the income tax effect of non-GAAP adjustments. Excluding these items, non-GAAP net income for the fourth quarter of fiscal 2015 was $11.4 million, or 12 cents per diluted share, compared with $19.3 million, or 21 cents per diluted share, for the third quarter of fiscal 2015.

Fiscal Year 2015 Results
Net revenue for the fiscal year 2015 was $372.0 million, up $119.5 million, or 47% from $252.5 million for the fiscal year 2014.

GAAP net loss for the fiscal year 2015 was $1.1 million, compared with net income of $6.1 million for the fiscal year 2014. On a non-GAAP basis, net income for the fiscal year 2015 was $42.7 million, or $0.46 per diluted share. This compares with non-GAAP net income of $52.3 million, or $0.58 per diluted share for the fiscal year 2014.

GAAP diluted net loss per share for the fiscal year 2015 as one cent, compared with diluted net income per share of seven cents for the fiscal year 2014.

Management Qualitative Comments
"Fiscal 2015 was a significant year for InvenSense," said Behrooz Abdi, president and CEO. "We achieved the highest revenue in company history, driven by strong market share gains and several high-volume customer wins. We also brought to market a record number of new products across our motion sensor, software and microphone portfolio intended to open up incremental revenue growth opportunities over the coming quarters. Our success in mobile in fiscal 2015 laid important groundwork for our continued achievement in the coming year, while the advancement of our platform strategy provides us with multiple entry points into verticals beyond mobile where our technology can provide significant value in the years to come."

Betflix urges rejection of AT&T and DirecTV merger

2015-05-05T13:55:00.002-04:00

Netflix (NASDAQ:NFLX) is pressing the FCC to reject the $48B merger of AT&T (NYSE:T) and DirecTV (NASDAQ:DTV), according to regulatory filings revealed today, on complaints about market power -- as the merger could "lead to its becoming the largest (Internet service provider) in the country as well" as becoming the biggest MVPD.

The remarks came as Netflix officials met with more than 20 FCC staff last week.

"Such market power creates new incentives and abilities to harm entities that AT&T perceives as competitive threats," Netflix reps said, "and will exacerbate the anticompetitive behavior in which AT&T has already engaged."

Netflix shares are up 3.8% today in the wake of BofA/Merrill Lynch's heavy upgrade; AT&T is down 1.2% and DirecTV is down 0.5%

Could Apple Watch Really Be Worth $26 Billion in sales?

2015-03-05T09:40:00.000-05:00

The Apple Watch may be a $26 billion business by 2018, Deutsche Bank analyst Sherri Scribner predicted in a note Thursday.

However, she only reiterated a hold rating on Apple Inc.'s stock, saying a limited impact from the Watch and Apple's heavy reliance on the iPhone offer "limited catalysts" to drive shares higher over the next few quarters.

Her $110 price target implies a 14% share-price decline from Apple's $128.54 closing price on Wednesday.

To be fair, Scribner is one of the most bearish Apple analysts on Wall Street. The average rating on Apple's stock among more than 40 analysts is overweight, and the average price target is $134.92, according to FactSet.

While Apple will undoubtedly outsell all rival smartwatches this year, according to Scribner, she expects the Watch to remain a minor product category in relation to the iPhone, comprising 10% or less of sales and EPS by 2018. Shares of Apple traded up 0.3% in premarket trade.

Market top---ETFs tell a story

2015-03-05T09:33:00.001-05:00

U.S. investors have pulled $16.8B from equity-based ETFs in 2015 and sent $16.9B to bonds. That’s the biggest divergence in quarterly data going back to 2000.

With nine straight quarters of stock-market gains, equity valuations at a five-year high, and the Fed bracing to raise interest rates, investors may be rethinking the $240B they've pumped into U.S. stocks over the past two years.

Bearish options contracts on the SP 500 are 9.25 points more than bullish ones. “There seems to be more apprehension and hesitation than we normally have at this stage of bull markets,” one analyst says.

Toll bros kills it

2015-02-24T10:18:00.001-05:00

Toll Brothers, Inc. (NYSE:TOL) (www.tollbrothers.com), the nation's leading builder of luxury homes, today announced results for its first quarter ended January 31, 2015.

FY 2015 First Quarter Financial Highlights:

FY 2015's first quarter net income was $81.3 million, or $0.44 per share, compared to net income of $45.6 million, or $0.25 per share, in FY 2014's first quarter.
Pre-tax income was $124.0 million, compared to pre-tax income of $71.2 million in FY 2014's first quarter.
Revenues of $853.5 million and home building deliveries of 1,091 units rose 33% in dollars and 18% in units, compared to FY 2014's first quarter. The average price of homes delivered was $782,300, compared to $693,600 in FY 2014's first quarter.
Net signed contracts of $873.2 million and 1,063 units rose 24% in dollars and 16% in units, compared to FY 2014's first quarter. The average price of net signed contracts was $821,500, compared to $766,100 in FY 2014's first quarter.
Backlog of $2.74 billion and 3,651 units rose 2% in dollars and was approximately flat in units, compared to FY 2014's first-quarter-end backlog. The average price of homes in backlog was $750,300, compared to $732,900 at FY 2014's first-quarter end. At FY 2015's first-quarter end, the Company also had a backlog of $295.8 million and 128 units in unconsolidated home building joint ventures in which the Company is a 50% partner.
Gross margin, excluding interest and write-downs, improved to 27.3%, compared to 24.4% in FY 2014's first quarter.
SG&A leverage (SG&A as a percentage of revenue) improved to 12.5%, compared to 15.2% in FY 2014's first quarter.
Income from operations improved to 11.4% of revenue, compared to 4.9% of revenue in FY 2014's first quarter.
Other income and Income from unconsolidated entities totaled $26.9 million, compared to $39.5 million in FY 2014's first quarter.
The Company ended its first quarter with 258 selling communities, compared to 263 at FYE 2014, and 238 at FY 2014's first-quarter end. The Company still projects to end FY 2015 with between 270 and 310 selling communities.
At FY 2015's first-quarter end, the Company had approximately 45,300 lots owned and optioned, compared to approximately 47,200 at FYE 2014 and approximately 51,200 one year ago.
In updating its guidance, the Company now expects to deliver between 5,200 and 6,000 homes in FY 2015 at an average price of $725,000 to $760,000, compared to previous guidance of 5,000 to 6,000 homes at an average price of $710,000 to $760,000. This compares to 5,397 deliveries in FY 2014 at an average price of $725,000.
The Company, as per prior guidance, projects full FY 2015 gross margins (pre-interest and pre-impairments) of approximately 26%, which is consistent with FY 2014.

Douglas C. Yearley, Jr., Toll Brothers' chief executive officer, stated: "Momentum (MMBF) continues to build as we begin the spring selling season. In our first quarter, we achieved 24% growth in the dollar value of signed contracts. Since the start of the second quarter, the number of signed contracts is up 13%.
"We continue to benefit from our ongoing geographic diversification strategy. While we remain the dominant luxury builder in the suburban Washington, DC to Boston corridor, our growth in the West and South and in urban centers has expanded our brand into more locations and product lines.
"Our California presence has increased significantly with the acquisition of Shapell Homes and several other well-timed Coastal California land purchases. This quarter, California produced 29% of the value of our signed contracts at an average price of approximately $1.1 million. Texas contributed 11% of the value of contracts with the Dallas division the main contributor. Our City Living division contributed 5% of the value of contracts at an average unit price of $2.3 million.
"We are optimistic about earnings growth in FY 2016. This guidance is based on the high quality of our land positions, continued strong sales, particularly in California, and projected delivery growth from City Living buildings in New York City in FY 2016."
Martin P. Connor, Toll Brothers' chief financial officer, stated: "Our gross margin, SG&A leverage and operating margin all improved significantly this quarter compared to one year ago. Our first quarter gross margin was particularly strong, due to a large number of high-priced deliveries from our Hoboken and New York City Living divisions.
"Subject to our normal caveats regarding forward-looking statements, we offer the following guidance: We project full FY 2015 (pre-interest and pre-impairment) margins to be approximately 26%, consistent with our previous guidance. In our second quarter, we project delivering approximately 32% of units from our first-quarter-end backlog at an average price of $720,000 to $740,000. With three months of sales behind us, we are updating our delivery guidance for the full FY 2015 to a range of 5,200 to 6,000 homes at an average price of $725,000 to $760,000, compared to our previous guidance of a range of 5,000 to 6,000 homes at an average price of $710,000 to $760,000. We still expect to end FY 2015 with between 270 and 310 communities as we position the Company for future growth."
Robert I. Toll, executive chairman, stated: "We are encouraged by the latest data from the Labor Department indicating strong job and wage growth momentum and also the Census Bureau's recent monthly reports showing solid growth in household formations, all of which are good for housing demand.
"More jobs and better jobs should boost household formations and provide a basis for stronger housing demand. With the latest release from the National Association of Realtors citing home price appreciation, our buyers, who often are selling a home to move up, will have more money to invest in their new home and more potential customers to buy their existing home. Another positive data point comes from the Conference Board, which said consumer confidence in January reached its highest level since August 2007. We believe these positive macroeconomic trends, coupled with recent Federal initiatives to increase mortgage availability, should support housing's recovery."
Doug Yearley stated: "Last week, Toll Brothers (TOL) was recognized as the Most Admired Home Builder in Fortune magazine's annual survey of the World's Most Admired Companies. This recognition speaks not only to the quality of our homes and communities, but also to the core of our business culture, our financial strength, our personnel, and our corporate management strategy. We salute all our Toll Brothers colleagues for their tremendous commitment to our customers and the hard work that led to this honor."
Bob Toll continued: "We were also recently named America's Most Trusted Home Builder" from among 133 U.S. home builders, based on a study of 43,200 new home shoppers in the nation's top 27 housing markets conducted by Lifestory Research. Since Toll Brothers began back in 1967, we have sought to build a brand whose foundations are quality and trust. I believe we have succeeded. Congratulations to all our Toll Brothers associates on these significant awards."
Toll Brothers' financial highlights for the FY 2015 first quarter ended January 31, 2015 (unaudited):

FY 2015's first-quarter net income was $81.3 million, or $0.44 per share diluted, compared to FY 2014's first-quarter net income of $45.6 million, or $0.25 per share diluted.
FY 2015's first-quarter pre-tax income was $124.0 million, compared to FY 2014 first-quarter pre-tax income of $71.2 million. FY 2015's first-quarter results included pre-tax inventory write-downs totaling $1.1 million ($0.9 million attributable to operating communities and $0.2 million attributable to future communities). FY 2014's first-quarter results included pre-tax inventory write-downs of $2.0 million ($1.3 million attributable to an operating community and $0.7 million attributable to future communities).
FY 2015's first-quarter total revenues of $853.5 million and 1,091 units increased 33% in dollars and 18% in units from FY 2014's first-quarter total revenues of $643.7 million and 928 units.
The Company's FY 2015 first-quarter net signed contracts of $873.2 million and 1,063 units, increased 24% in dollars and 16% in units, compared to FY 2014's first-quarter net signed contracts of $701.7 million and 916 units.
On a per-community basis, FY 2015's first-quarter net signed contracts was 4.09 units per community, compared to first quarter totals of 3.95 in FY 2014, 4.34 in FY 2013, 2.86 in FY 2012 and 2.81 in FY 2011.
In FY 2015, first-quarter-end backlog of $2.74 billion and 3,651 units increased 2% in dollars and was approximately flat in units, compared to FY 2014's first-quarter-end backlog of $2.69 billion and 3,667 units.
Excluding write-downs and interest, FY 2015's first-quarter gross margin improved to 27.3% from 24.4% in FY 2014's first quarter. FY 2015's first-quarter gross margin, including write-downs and interest, improved to 23.8% from 20.1% in FY 2014's first quarter.
Interest included in cost of sales declined to 3.3% of revenue in FY 2015's first quarter from 4.0% in FY 2014's first quarter.
SG&A as a percentage of revenue improved to 12.5%, compared to 15.2% in FY 2014's first quarter.
Income from operations of $97.1 million represented 11.4% of revenues in FY 2015's first quarter, compared to $31.8 million and 4.9% of revenues in FY 2014's first quarter.
Other income and Income from unconsolidated entities in FY 2015's first quarter totaled $26.9 million, including an $8.1 million gain from the sale of home security accounts to a third party by the Company's wholly-owned Westminster Security Company, compared to $39.5 million in FY 2014's same quarter, which included $23.5 million related to the sale of two shopping centers in which Toll Brothers was a 50% partner.
FY 2015's first-quarter cancellation rate (current-quarter cancellations divided by current-quarter signed contracts) was 5.6%, compared to 7.0% in FY 2014's first quarter. As a percentage of beginning-quarter backlog, FY 2015's first-quarter cancellation rate was 1.7%, compared to 1.9% in FY 2014's first quarter.
In FY 2015's first quarter, unconsolidated home building joint ventures in which the Company is a 50% partner delivered 27 units totaling $19.3 million of revenues, compared to 15 units totaling $11.6 million of revenues in the first quarter of FY 2014. The Company recorded its share of the results from these entities' operations in "Income from Unconsolidated Entities" on the Company's Statements of Operations.
In FY 2015's first quarter, unconsolidated home building joint ventures in which the Company is a 50% partner signed 20 contracts for $30.7 million, compared to 11 contracts for $7.8 million in FY 2014's first quarter.
At January 31, 2015, unconsolidated home building joint ventures in which the Company is a 50% partner had a backlog of $295.8 million and 128 units, compared to $42.4 million and 58 units at January 31, 2014.
The Company ended its FY 2015 first quarter with $511 million in cash and marketable securities, compared to $598 million at FYE 2014, and $1.20 billion at FY 2014's first-quarter end. At FY 2015's first-quarter end, the Company had $933 million available under its $1.035 billion, 15-bank credit facility, which matures in August 2018.
The Company's Stockholders' Equity at FY 2015's first-quarter end increased 9.4% to $3.96 billion, compared to $3.62 billion at FY 2014's first-quarter end.
The Company ended its FY 2015 first quarter with a net debt-to-capital ratio⁽¹⁾ of 41.5%, compared to 41.3% at FYE 2014 and 34.1% at FY 2014's first-quarter end. After the closing of the Shapell acquisition in early February 2014, the Company had a pro forma net debt-to-capital ratio of approximately 47.0%.
During the first quarter of FY 2015, the Company repurchased approximately 201,000 shares of its common stock at an average price of $31.08 for a total purchase price of $6.2 million.
The Company ended FY 2015's first quarter with approximately 45,300 lots owned and optioned, compared to 47,200 one quarter earlier, 51,200 one year earlier and 91,200 at its peak at FY 2006's second-quarter end. Approximately 36,100 of these 45,300 lots were owned, of which approximately 15,600 lots, including those in backlog, were substantially improved.
In the first quarter of FY 2015, the Company purchased 1,352 lots for $233.9 million.
The Company ended FY 2015's first quarter on January 31, 2015, with 258 selling communities, compared to 263 at FYE 2014 and 238 at FY 2014's first-quarter end. The Company still expects to end FY 2015 with between 270 and 310 selling communities.
Based on FY 2015's first-quarter-end backlog and the pace of activity at its communities, the Company now estimates it will deliver between 5,200 and 6,000 homes in FY 2015, compared to previous guidance of 5,000 to 6,000 units. It believes the average delivered price for FY 2015 will be $725,000 to $760,000 per home, compared to the previous guidance of $710,000 to $760,000.
In the second quarter of FY 2015, the Company projects delivering approximately 32% of units from its first-quarter-end backlog at an average price of $720,000 to $740,000.
The Company projects full FY 2015 gross margins (pre-interest and pre-impairments) of approximately 26%, which is consistent with FY 2014 results, excluding charges.
In FY 2015's first quarter, Gibraltar Capital and Asset Management, the Company's wholly owned subsidiary that invests in distressed loans and real estate, reported pre-tax income of $1.0 million, compared to $3.3 million of income in FY 2014's first quarter.
At FY 2015's first-quarter end, the Company had five rental apartment projects under construction totaling approximately 1,900 units through joint ventures in which the Company's ownership ranges from 25% to 50%. The Company has begun leasing units in two of these projects.

Home Depot Reports

2015-02-24T10:03:00.001-05:00

Home Depot ^®, the world's largest home improvement retailer, today reported sales of $19.2 billion for the fourth quarter of fiscal 2014, an 8.3 percent increase from the fourth quarter of fiscal 2013. Comparable store sales for the fourth quarter of fiscal 2014 were positive 7.9 percent, and comp sales for U.S. stores were positive 8.9 percent.
Net earnings for the fourth quarter of fiscal 2014 were $1.4 billion, or $1.05 per diluted share, compared with net earnings of $1.0 billion, or $0.73 per diluted share, in the same period of fiscal 2013. For the fourth quarter of fiscal 2014, diluted earnings per share increased 43.8 percent from the same period in the prior year.
Fourth quarter of fiscal 2014 results reflect a pretax gain on sale of $111 million, or $0.05 per diluted share, related to the sale of a portion of the Company's equity ownership in HD Supply Holdings, Inc. Adjusting for the gain on sale, diluted earnings per share were $1.00 for the fourth quarter of fiscal 2014, up 37.0 percent from the same period in the prior year.
Fiscal 2014

Sales for fiscal year 2014 were $83.2 billion, an increase of 5.5 percent from fiscal year 2013. Total company comparable store sales for fiscal year 2014 increased 5.3 percent, and comp sales for U.S. stores were positive 6.1 percent for the year.
Earnings per diluted share in fiscal year 2014 were $4.71, compared to $3.76 per diluted share in fiscal year 2013, an increase of 25.3 percent.
Fiscal 2014 results reflect a pretax gain on sale of $323 million, or $0.15 per diluted share, related to the sale of a portion of the Company's equity ownership in HD Supply Holdings, Inc. Fiscal 2014 results also reflect a pretax net expense of $33 million, or $0.02 per diluted share, related to the Company's 2014 data breach, of which $5 million was recognized in the fourth quarter.
"We had a strong finish to the year, as strength across the store, the recovering U.S. housing market and solid execution aided our business in 2014," said Craig Menear, chairman, CEO and president. "I'd like to thank our associates for their hard work and commitment to our customers."
Capital Allocation Strategy
The Company today announced that its board of directors declared a 26 percent increase in its quarterly dividend to $0.59 cents per share. "The board increased the dividend for the sixth time in as many years, representing our commitment to create value for our shareholders," said Menear. The dividend is payable on March 26, 2015, to shareholders of record on the close of business on March 12, 2015. This is the 112th consecutive quarter the Company has paid a cash dividend.
The board of directors also authorized an $18.0 billion share repurchase program, replacing its previous authorization. Since 2002 and through February 1, 2015, the Company has returned more than $53 billion of cash to shareholders through repurchases, repurchasing approximately 1.2 billion shares.
Combined with today's announcements, the Company reiterated its capital allocation principles:

Dividend Principle: Targeting a dividend payout ratio of approximately 50 percent.
Share Repurchase Principle: After meeting the needs of the business, will use excess cash to repurchase shares, with the intent of completing $18.0 billion of share repurchases by the end of fiscal 2017.
Return on Invested Capital Principle: Maintain a high return on invested capital, with a goal of reaching 27 percent by the end of fiscal 2015.

Fiscal 2015 Guidance
Given the significant strengthening of the U.S. dollar, the Company provided a range of sales, comp sales and diluted earnings-per-share growth to reflect the difference between 2014 average exchange rates and current exchange rates. If currency exchange rates remain where they are today, this would cause a negative impact to fiscal 2015 net sales growth of approximately $1 billion, as well as a negative impact on diluted earnings per share of approximately $0.06 per share. The low-end of the Company's sales and diluted earnings-per-share growth guidance reflects this currency impact.

Sales growth of approximately 3.5 to 4.7 percent
Comparable store sales growth of approximately 3.3 to 4.5 percent
Six new stores
Flat gross margin
Operating margin expansion of approximately 60 basis points
Tax rate of approximately 37 percent
Share repurchases of approximately $4.5 billion
Diluted earnings-per-share growth after anticipated share repurchases of approximately 8.5 percent to 10 percent, or $5.11 to $5.17
Capital spending of approximately $1.6 billion
Depreciation and amortization of approximately $1.8 billion
Cash flow from the business of approximately $9.0 billion

The Company's fiscal 2015 diluted earnings-per-share guidance does not include an accrual for other reasonably possible losses related to the data breach. Other than the breach-related costs contained in the Company's fiscal 2014 earnings, at this time the Company is not able to estimate the costs, or a range of costs, related to the breach. Costs related to the breach may include liabilities to payment card networks for reimbursements of credit card fraud and card reissuance costs; liabilities related to the Company's private label credit card fraud and card reissuance; liabilities from current and future civil litigation, governmental investigations and enforcement proceedings; future expenses for legal, investigative and consulting fees; and incremental expenses and capital investments for remediation activities. Those costs may have a material adverse effect on the Company's financial results in fiscal 2015 and/or future periods.

4 pharma stocks analysts love

2015-02-23T13:16:00.000-05:00

AbbVie Inc. (NYSE: ABBV) jumps to the top of the Jefferies list to become the new number one pick. The company was at the center of the issues that hit Gilead, and it was sold-off extremely hard, which the Jefferies analysts feel gives investors a perfect entry point to buy the stock. Pharmacy managers are taking sides on which hepatitis C drugs they will be offering to patients based on the discounts provided by the companies making the drug. In effect, it becomes somewhat of a price war, and price wars ultimately can evaporate earnings. The Jefferies team is very positive on the stock, citing numerous drivers, which they dub an “iceberg” of positive catalysts for the stock in 2015 and beyond, especially after the sell-off.
AbbVie investors are paid a very solid 3.2% dividend. The Jefferies price target for the stock is a whopping $80. The Thomson/First Call consensus price target is $68.64. AbbVie closed Friday at $61.30, up almost 4%.

Eli Lilly & Co. (NYSE: LLY) has faced some of the more negative stock coverage from Wall Street, and some analysts may have overfocused on patent expirations on key products, which has kept enthusiasm muted on the stock. Eli Lilly and partner Boehringer Ingelheim recently received FDA approval for Glyxambi (Jardiance/Tradjenta) tablets for use as an adjunct to diet and exercise to improve glycemic control in adults with type II diabetes. The FDA approval of Glyxambi helps to make up for the loss of revenues from the genericization of drugs like Cymbalta and Evista, which hurt fourth-quarter earnings.
Investors are paid a 2.8% dividend. The Jefferies price objective is raised to $87. The consensus is lower at $75.06. Eli Lilly closed Friday at $71.88 a share.

Pfizer Inc. (NYSE: PFE) now moves down to the number two slot on the top picks list at Jefferies. The company rocked Wall Street recently by announcing a gigantic $15.2 billion purchase of Hospira. Hospira shareholders will be paid $90 a share. Hospira is a top provider of sterile injectable drugs, including those used for acute care and cancer treatment, as well as infusion technologies and biosimilars, which are subsequent versions of drugs with patents that have expired. In other recent solid news for Pfizer, the company’s drug Ibrance was approved for advanced breast cancer by U.S. regulators more than two months ahead of schedule, letting the drug maker proceed with one of its most promising new blockbusters, a turn-of-events the Jefferies team likes.
Pfizer investors are paid a solid 3.2% dividend. The Jefferies price target is raised to $42, and the consensus target is posted at $35.83. Pfizer closed Friday at $34.56.

Zoetis Inc. (NYSE: ZTS) focuses on the discovery, development, manufacture and commercialization of animal health medicines and vaccines for livestock and companion animals worldwide. The company has a top initial public offering two years ago and essentially traded sideways until breaking out back in November of last year. At the end of the year, it was one of the largest holdings in activist investor Bill Ackman’s Pershing Square hedge fund. The fund upped its stake in the company by 36.03 million shares to 41.57 million shares. Recently, the company announced that it completed the acquisition of the animal health assets of Abbott Laboratories.
Zoetis investors are paid a small 0.7% dividend. The Jefferies price target is $53, and the consensus price objective is $48.83. Shares ended the trading day on Friday at $45.60.
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Existing home sales---what you need to know

2015-02-23T12:39:00.002-05:00

Existing-home sales rose in October for the second straight month and are now above year-over-year levels for the first time in a year, according to the National Association of Realtors ^®.
Total existing-home sales¹, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, rose 1.5 percent to a seasonally adjusted annual rate of 5.26 million in October from an upwardly-revised 5.18 million in September. Sales are at their highest annual pace since September 2013 (also 5.26 million) and are now above year-over-year levels (2.5 percent from last October) for the first time since last October.
Lawrence Yun, NAR chief economist, says the housing market this year has been a tale of two halves. “Sales activity in October reached its highest annual pace of the year as buyers continue to be encouraged by interest rates at lows not seen since last summer, improving levels of inventory and stabilizing price growth,” he said. “Furthermore, the job market has shown continued strength in the past six months. This bodes well for solid demand to close out the year and the likelihood of additional months of year-over-year sales increases.”
The median existing-home price² for all housing types in October was $208,300, which is 5.5 percent above October 2013. This marks the 32^nd consecutive month of year-over-year price gains.
Total housing inventory³ at the end of October fell 2.6 percent to 2.22 million existing homes available for sale, which represents a 5.1-month supply at the current sales pace – the lowest since March (also 5.1 months). Unsold inventory is now 5.2 percent higher than a year ago, when there were 2.11 million existing homes available for sale.
“The growth in housing supply this year will likely prevent the drastic sales slowdown and coinciding spike in home prices we saw last winter due to low inventory,” says Yun. “However, more housing starts are needed to increase supply, meet current demand and keep price growth in check.”
All-cash sales were 27 percent of transactions in October, up from 24 percent in September but down from 31 percent in October of last year. Individual investors, who account for many cash sales, purchased 15 percent of homes in October, up from 14 percent last month but below October 2013 (19 percent). Sixty-five percent of investors paid cash in October.
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage in October dropped to 4.03 percent, its lowest level since June 2013 (4.07 percent), and down from 4.16 percent in September.
The percent share of first-time buyers in October remained at 29 percent for the fourth consecutive month; first-time buyers have represented less than 30 percent of all buyers in 18 of the past 19 months. A separate NAR survey released earlier this month⁴ revealed that the annual share of first-time buyers fell to its lowest level in nearly three decades.
Distressed homes⁵ – foreclosures and short sales – were in the single-digits for the third month this year, decreasing to 9 percent in October from 10 percent in September; they were 14 percent a year ago. Seven percent of October sales were foreclosures and 2 percent were short sales. Foreclosures sold for an average discount of 15 percent below market value in October (14 percent in September), while short sales were discounted 10 percent (14 percent in September).
“Although distressed sales are trending downward, there are still areas (such as judicial states Florida, Maryland and New York) plagued by foreclosures, and homeowners faced with the awful choice between a tax bill they are unable to pay and losing their home,” says NAR President Chris Polychron, executive broker with 1st Choice Realty in Hot Springs, Ark. “Realtors^® urge the U.S. House to schedule a vote on “The Mortgage Forgiveness Tax Relief Act,” as soon as possible. This bipartisan legislation would extend an expired provision that has helped millions of distressed American families by allowing tax relief when lenders forgive a portion of the mortgage debt they owe.”
Properties typically stayed on the market in October longer (63 days) than last month (56 days) and a year ago (54 days). Short sales were on the market for a median of 150 days in October, while foreclosures sold in 68 days and non-distressed homes took 61 days. Thirty-three percent of homes sold in October were on the market for less than a month.
Single-family home sales increased 1.3 percent to a seasonally adjusted annual rate of 4.63 million in October from 4.57 million in September, and are now 2.9 percent above the 4.50 million pace a year ago. The median existing single-family home price was $208,700 in October, up 5.6 percent from October 2013.
Existing condominium and co-op sales increased 3.3 percent to a seasonally adjusted annual rate of 630,000 units in October from 610,000 in September, unchanged from the 630,000 unit pace a year ago. The median existing condo price was $205,400 in October, which is 4.5 percent higher than a year ago.
Regionally, October existing-home sales in the Northeast climbed 2.9 percent to an annual rate of 710,000, and are 4.4 percent above a year ago. The median price in the Northeast was $246,900, which is 1.2 percent above a year ago.
In the Midwest, existing-home sales jumped 5.1 percent to an annual level of 1.24 million in October, and are 2.5 percent higher than October 2013. The median price in the Midwest was $164,100, up 6.8 percent from a year ago.
Existing-home sales in the South increased 2.8 percent to an annual rate of 2.17 million in October, and are now 5.3 percent above October 2013. The median price in the South was $178,000, up 5.1 percent from a year ago.
Existing-home sales in the West declined 5.0 percent to an annual rate of 1.14 million in October, and remain 3.4 percent below a year ago. The median price in the West was $296,800, which is 5.0 percent above October 2013.

Why is Apple spending $2 billion to build data centers?

2015-02-23T10:44:00.001-05:00

Apple Inc (AAPL) is the greatest stock of our time. Now the company has said it would spend 1.7 billion euros ($1.9 billion) to build two data centers in Europe that would be entirely powered by renewable energy and create hundreds of jobs.

The company said the centers, in Ireland and Denmark, will power Apple's online services, including the iTunes Store, App Store, iMessage, Maps and Siri for customers across Europe.

The investment is set to be evenly divided between the two countries, with the Irish government confirming that 850 million euros would be spent in Ireland. The two data centers are expected to begin operations in 2017.

"This significant new investment represents Apple's biggest project in Europe to date," Apple CEO Tim Cook said in a statement.

"We’re thrilled to be expanding our operations, creating hundreds of local jobs and introducing some of our most advanced green building designs yet," he added.

The data center in Ireland will be located in Athenry, close to Galway on the west coast while in Denmark, it will be in Viborg, western Denmark.

In a sign of how important Apple's investment in Denmark was, the country's trade and development minister issued a statement mirroring that of the iPhone maker's, adding the two data centers would be among the largest in the world.

Ireland's government also reacted to the announcement, saying 300 jobs would be added in the county of Galway during the multiple phases of the project, a boost as it seeks to cut the unemployment rate below 10 percent this year.

"As the Government works to secure recovery and see it spread to every part of the country, today's announcement is another extremely positive step in the right direction,” Irish Prime Minister Enda Kenny said in a statement.

Disney Jacks prices

2015-02-23T10:35:00.000-05:00

The Walt Disney Co. raised ticket prices to attend Disneyland, Walt Disney World and the rest of its U.S. theme parks, effective Sunday 2/22/15.

A one-day ticket for either Disneyland or California Adventure in Anaheim, California, is now $99 for anyone 10 or older, the company said. That's up from $96.

Single-day tickets for the Magic Kingdom at Walt Disney World in Lake Buena Vista, Florida, are now $105, up from $99.

Disney has continued to see strong attendance growth at its theme parks and resorts.

For the quarter ended Dec. 27, revenue for the segment rose 9 percent to $3.9 billion, as attendance at the company's California and Florida parks climbed 7 percent, with Walt Disney World and the Disneyland Resort each setting all-time quarterly attendance records.

A measles outbreak linked to Disney's Southern California theme parks hasn't hurt attendance.

Earlier this month, CEO Bob Iger said in an interview with CNBC that the company was seeing no discernible impact on attendance or bookings from the outbreak, which was revealed last month.

More than 70 people in California, including six Disneyland employees, and about two dozen others in six states, Mexico and Canada have been sickened in the outbreak.

Among other price changes that took effect Sunday: A one-day ticket to Epcot, Disney's Hollywood Studios and Disney's Animal Kingdom now is $97, up from $94.

Disney also bumped up ticket prices for children ages 3 to 9.

Kids in that age bracket will be charged $93 for a single-day ticket at Disneyland. That's up from $90. For the Magic Kingdom, that ticket is now $99, up from $93. For the other theme parks it's now $91, up from $88.

Disney typically raises ticket prices at its U.S. theme parks annually, said Suzi Brown, a Disneyland Resort spokeswoman.

"We continually add new experiences, and many of our guests select multiday tickets or annual passes, which provide a great value and additional savings," she said.

Linn energy and LinnCo to sell offerings

2015-02-23T10:30:00.002-05:00

On February 20, 2015, Linn Energy, LLC (the “Company”) entered into an Amended and Restated Equity Distribution Agreement (the “Distribution Agreement”) with Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and UBS Securities LLC (collectively, the “Managers”). Pursuant to the terms of the Distribution Agreement, the Company may issue and sell from time to time through the Managers, as the Company’s sales agents, units representing limited liability company interests in the Company (the “Units”) having an aggregate offering price of up to $500 million. Sales of the Units, if any, made under the Distribution Agreement will be made by means of ordinary brokers’ transactions, through the facilities of The NASDAQ Global Select Market, any other national securities exchange or facility thereof, a trading facility of a national securities association or an alternate trading system, to or through a market maker or directly on or through an electronic communication network, a “dark pool” or any similar market venue, at market prices, in block transactions, or as otherwise agreed upon by the Managers and the Company. The Units have been registered under the Securities Act of 1933, as amended (the “Securities Act”), pursuant to a Registration Statement on Form S-3 (Registration No. 333-184647) (the “Registration Statement”) of the Company, as amended, and as supplemented by the Prospectus Supplement dated February 20, 2015 relating to the sale of the Units, filed with the Securities and Exchange Commission pursuant to Rule 424(b)(5) of the Securities Act on February 20, 2015.

This may raise much needed cash, but after units have been cut in half over the last few years we have to question the timing here

MGM Resorts Reports

2015-02-17T11:06:00.001-05:00

Fourth Quarter Consolidated Results
Diluted loss per share for the fourth quarter of 2014 was $0.70 compared to diluted loss per share of $0.12 in the prior year fourth quarter. The current year fourth quarter income tax provision was unfavorably impacted by a non-cash charge due to an increase in valuation allowance recorded against the Company's foreign tax credit deferred tax asset. The Company's income tax provision per diluted share was $0.67 for the quarter. Absent the impact of the valuation allowance, a small tax benefit would have been recorded in the quarter.
The following table lists certain other items that affect the comparability of the current and prior year quarterly results (approximate EPS impact shown, net of tax, per share; negative amounts represent charges to income):

Three months ended December 31,	2014	2013
Preopening and start-up expenses	$ (0.02)	$
Income (loss) from unconsolidated affiliates:
Harmon-related property transactions, net	(0.02)
Non-operating items from unconsolidated affiliates:
CityCenter loss on retirement of long-term debt		(0.09)
Silver Legacy gain on retirement of long-term debt		0.02

Wholly Owned Domestic Resorts
Casino revenue related to wholly owned domestic resorts increased 5% compared to the prior year quarter due to increases in both table games volume and hold percentage. Table games hold percentage in the fourth quarter of 2014 was 21.8% compared to 20.2% in the prior year quarter. Slots revenue increased 5% compared to the prior year quarter, due to slightly higher win along with a reduction in the Company's accrual for slot points based on a change in estimated point redemption.
Rooms revenue increased 6% with Las Vegas Strip REVPAR⁽²⁾ up 7%. The following table shows key hotel statistics for the Company's Las Vegas Strip resorts:

Three months ended December 31,	2014	2013
Occupancy %	88%	85%
Average Daily Rate (ADR)	$ 138	$ 133
Revenue per Available Room (REVPAR)	$ 121	$ 114

Food and beverage revenue increased 6% as a result of increased convention and banquet business and the opening of several new outlets. Operating income for the Company's wholly owned domestic resorts increased 10% for the fourth quarter of 2014 compared to the prior year quarter.
MGM China
On February 17, 2015, as part of its regular dividend policy, MGM China's Board of Directors announced it will recommend a final dividend for 2014 of $120 million to MGM China shareholders subject to approval at the MGM China 2015 annual shareholders meeting. If approved, MGM Resorts International will receive $61 million, its 51% share of this dividend. In addition, MGM China's Board of Directors announced a special dividend of $400 million, which will be paid to shareholders of record as of March 10, 2015 and distributed on or about March 19, 2015. MGM Resorts International will receive $204 million, its 51% share of the special dividend.
Key fourth quarter results for MGM China include the following:

MGM China earned net revenue of $719 million, a 22% decrease compared to the prior year quarter;
Main floor table games revenue increased 19% compared to the prior year quarter. Main floor table games volume decreased 4% and hold percentage was 27.2% in the current year quarter compared to 22.2% in the prior year quarter;
VIP table games revenue decreased 39% due to lower VIP table games turnover of 32% compared to the prior year quarter, as well as hold percentage of 2.6% in the current year quarter compared to 2.8% in the prior year quarter;
MGM China's Adjusted EBITDA was $185 million, a 22% decrease compared to the prior year quarter;
MGM China's Adjusted EBITDA margin increased by 10 basis points compared to the prior year quarter to 25.8% as a result of an increase in main floor table games mix; and
Operating income was $109 million compared to $162 million in the prior year quarter.

Income (Loss) from Unconsolidated Affiliates
The following table summarizes information related to the Company's share of income from unconsolidated affiliates:

Three months ended December 31,	2014	2013
	(In thousands)
CityCenter	$ (18,114)	$ 12,037
Borgata	11,304	(196)
Other	4,683	4,069
	$ (2,127)	$ 15,910

In September 2014, the Company was relicensed in the state of New Jersey. As a result, the Company resumed accounting for its 50% interest in Borgata under the equity method and has adjusted its prior period financial statements retroactively as required by generally accepted accounting principles.
Results for CityCenter Holdings, LLC ("CityCenter") for the fourth quarter of 2014 include the following (see schedules accompanying this release for further detail on CityCenter's fourth quarter results):

Net revenue from resort operations decreased by 4% to $289 million compared to $301 million in the prior year quarter, due to lower table games hold and volume at Aria;
Adjusted EBITDA from resort operations was $78 million, a decrease of 16% compared to the prior year quarter;
Adjusted EBITDA at Aria decreased by 22% year over year driven primarily by a decrease in table games volume and hold;
Aria's table games hold percentage was 21.5% compared to 26.0% in the prior year quarter;
Aria's occupancy percentage was 91.1% and its ADR was $217, resulting in REVPAR of $198, a 9% increase compared to the prior year quarter;
Vdara reported record fourth quarter EBITDA led by a 13% increase in REVPAR; and
Crystals reported Adjusted EBITDA of $11 million, an increase of 2% from the prior year quarter.

CityCenter reported an operating loss of $58 million for the fourth quarter of 2014 compared to operating income of $26 million in the prior year quarter. The lower fourth quarter result was due to decreased operating results at Aria as discussed above and a property transaction charge of $39 million. The property transaction charge primarily relates to a settlement with an insurer participating in CityCenter's Owner Controlled Insurance Program in conjunction with the global settlement discussed below. In addition, the prior year quarter included $26 million of income related to property transactions, net, primarily related to a $33 million gain associated with the settlement of insurance claims for errors and omissions with respect to the original construction of CityCenter.
As previously announced, in December 2014, the Company and CityCenter entered into a settlement agreement with Perini Building Company, Inc. ("Perini"), general contractor for CityCenter, the remaining Perini subcontractors and relevant insurers to resolve all outstanding project lien claims and CityCenter's counterclaims relating to the Harmon Hotel and Spa. The settlement was subject to execution of a global settlement agreement among the parties described above, which was subsequently executed, and CityCenter's procurement of replacement general liability insurance covering construction of the CityCenter development (which was obtained in January 2015). The proceeds pursuant to such global settlement agreement, combined with certain prior Harmon-related insurance settlement proceeds, will result in a gain of approximately $160 million to be recorded by CityCenter during the first quarter of 2015.
Full Year 2014 Results
Consolidated net revenue for 2014 was $10.1 billion, a 3% increase over 2013, and Adjusted Property EBITDA increased 5% compared to the prior year to $2.5 billion. Net revenue from wholly owned domestic resorts was $6.3 billion, a 5% increase compared to the prior year. Adjusted Property EBITDA from wholly owned domestic resorts increased 5% to $1.5 billion for 2014.
MGM China net revenue was $3.3 billion for 2014, a 1% decrease from 2013, and Adjusted EBITDA was a record $850 million compared to $814 million in the prior year. CityCenter reported net revenue from resort operations of a record $1.2 billion, a 3% increase compared to the prior year, and Adjusted EBITDA related to resort operations of $317 million compared to $316 million in the prior year.
Diluted loss per share attributable to the Company for 2014 was $0.31 compared to diluted loss per share of $0.35 in 2013. The following table lists items that affect the comparability of the current year and prior year annual results (approximate EPS impact shown, net of tax, per share; negative amounts represent charges to income):

Year ended December 31,	2014	2013
Preopening and start-up expenses	$ (0.05)	$ (0.02)
Property transactions, net	(0.05)	(0.17)
Income (loss) from unconsolidated affiliates:
Harmon-related property transactions, net	(0.02)
Non-operating items from unconsolidated affiliates:
CityCenter loss on retirement of long-term debt		(0.09)
Silver Legacy gain on retirement of long-term debt		0.02

The tax provision in 2014 increased $263 million compared to 2013 primarily as a result of an increase in valuation allowance recorded against the Company's foreign tax credit deferred tax asset in 2014 and realization of deferred tax assets in 2013 that were previously offset by valuation allowance, partially offset by tax expense recognized in 2013 as a result of re-measuring net deferred tax liabilities in Macau.
Financial Position
"As a result of a successful year and our continued focus on our balance sheet, we improved leverage and raised significant capital in 2014," said Dan D'Arrigo, Executive Vice President, CFO and Treasurer of MGM Resorts International. "We believe that our improved cash flows, the announced dividends from MGM China, $1.25 billion in capital raised in the fourth quarter, along with revolver availability provides us with adequate liquidity to fund our 2015 maturities and growth initiatives."
The Company's cash balance at December 31, 2014 was $2.3 billion, which included $546 million at MGM China. At December 31, 2014, the Company had $2.7 billion of borrowings outstanding under its $3.9 billion senior secured credit facility and $553 million outstanding under the $2.0 billion MGM China credit facility.

Newmont mining delcares dividend

2015-02-17T10:58:00.003-05:00

Newmont Mining (NYSE:NEM) declares $0.025/share quarterly dividend, in line with previous.

Forward yield 0.4%

Payable March 26; for shareholders of record March 12; ex-div March 10

Empire State Survey Results

2015-02-17T10:58:00.001-05:00

Empire State Survey: +7.78 vs. 9.5 expected, 9.95 prior.

New Orders +1.22 vs. +6.09.

Shipments +14.12 vs. +9.59

Number of Employees 10.11 vs. 13.68

UK inflation rate to record LOW??

2015-02-17T10:50:00.001-05:00

U.K. inflation fell more than economists forecast in January, dropping to a record low as food and fuel prices tumbled.
Consumer-price growth slowed to 0.3% from 0.5% in December, the lowest since the data series began in 1989. Economists had forecast a 0.4% rate in January.

As the Bank of England cut its near-term inflation projections last week to reflect the drop in oil prices, Governor Mark Carney warned the rate could fall into deflationary territory in the coming months.

The pound is +0.2% at $1.5391, while the FTSE 100 is +0.5%.

ICYMI: Time to accumulate prospect capital

2015-02-17T10:49:00.002-05:00

This article will be the first time I have opined on Prospect Capital Corporation (NASDAQ:PSEC) a beaten down stock with a great yield. While others have covered the stock in the past I felt it prudent to discuss the name for my readers and examine the company in depth because I believe shares are at a very attractive entry point for either those seeking an income source, or those looking to compound gains over a long-term horizon.

For some who are familiar with the name these opening sections may serve as bit of a review but it is necessary to orient those who are new to the company. Prospect Capital is a business development company and is the second largest externally managed one (by market cap) in the United States. A business development company is a regulated investment company. Essentially, here in the United States, these types of companies invest in smaller businesses that need capital funding to grow their operations. In turn, the business development company stands to make money by earning interest paid on the loans made. This is a simplistic view of the model, but is an accurate description.

Turning to Prospect specifically, it focuses on offering non-control debt financing to corporate management teams as well as financial sponsors. However, it also makes very selective acquisitions by investing in multiple levels of business' capital structure. The company has grown its portfolio substantially in the last few years and up until very recently.............READ MORE

More on why its time to pick up Fifth Street Shares

2015-02-13T09:49:00.004-05:00

Fifth Street Finance Corp (NASDAQ:FSC) has my attention today. For my followers unfamiliar with the name it is a specialty finance company known as a business development company. It finances growing companies and its goal is to make money from the interest and other terms of the loan agreements it has in place. Fifth Street lends to and invests in small and mid-sized companies in connection with investments by private equity sponsors. This business generates strong margins and earnings but comes with the risks of the financed companies going under. Still, the model works and has allowed Fifth Street to pay its sizable dividends. That said, the new management team that has come in is cleaning house and its actions have driven the stock down to a fresh new 52-week low of about $7.00 (figure 1). But these actions may just save the company and protect a long-term investors. In this article I will address the company just two months after I thought it was worth owning at $8.50. Here we are now, down 17%. So what is the long-term investor to do? Well, I think with this new management, we have a 'new' investment. The company seems like it will operate more conservatively with this new team following its earnings report this morning. There is a lower dividend which I will cover in a bit, but the yield is still stellar. And the dividend is sustainable. For those holding, I will.......READ MORE

Verizon finally stepping up???

2015-02-13T09:46:00.001-05:00

A lot more Verizon Wireless (VZ) customers finally have a chance to benefit from the ongoing mobile price wars and reduce their bills, but they may need to pick up the phone or hit the company’s web site to grab the best deals.

Rampant price cutting in the mobile market has been a huge boon to consumers. T-Mobile (TMUS) got things started almost two years ago with lower monthly rates and, slowly, the competition has followed. Until now, especially at Verizon and AT&T (T), much of the benefit has gone to those willing to switch providers, as many deals were offered only to new customers.

That's started to change in recent months as Verizon’s latest price cuts are becoming available to millions of existing customers. For example, last week, Verizon cut $10 per month off the price of its 1 GB, 2 GB, 3 GB and 4 GB plans. Existing customers can qualify but the cuts don’t go into effect automatically. To get a discount, consumers have to call customer service, visit a store or change their account online. The offer is termed a limited time promotion, so the cuts may not be available in a few months.

Verizon says the cuts aren't automatic because it wants to offer customers a choice of taking more data at the same price instead of sticking with the same amount at a lower price. “We won’t automatically migrate customers to promos because they may decide to do something different,” says spokesman David Samberg.

Of course, opting for more data also has a softer impact on Verizon’s bottom line, since no revenue is lost if a customer is convinced to pay the same monthly price.

The company is also extending discounts for customers who decide to pay for a new phone on the company’s installment plan, known as Edge. Instead of paying only $199 for a new iPhone 6, for example, and signing a two-year contract, a customer pays full price for the phone split across 24 monthly installments of $27. In return for giving up the phone subsidy that’s built into the $199 price, the customer also pays less for monthly service.

That monthly discount will now be $25 if the customer buys at least 6 GB of data, a level that previously required a 10 GB or greater plan. Customers buying at least 4 GB of data get a $15 monthly discount on Edge plans.

In November, Verizon began offering discounts to its existing customers, but concentrated on data plans of 10 GB and up.

Verizon’s cuts follow a somewhat tumultuous fourth quarter, when the company’s churn rate — the percentage of customers who left — hit 1.14% for typical monthly accounts, up from 0.96% a year earlier. Overall, Verizon still gained 2 million customers in the quarter, since more new people signed up than left.

Response Genetics Files another SEC 8-K

2015-02-12T12:43:00.001-05:00

On February 3, 2015 (the "Amendment Closing Date"), Response Genetics, Inc. (the "Company") entered into a first amendment (the "Amendment") to that certain credit agreement (the "Credit Agreement"), dated July 30, 2014, with SWK Funding LLC, as the agent (the "Agent"), and the lenders (including SWK Funding LLC) party thereto from time to time (the "Lenders"). Pursuant to the Amendment, the Company drew an additional $1,500,000 of the maximum $12,000,000 term loan commitment amount (the "Loan Commitment Amount") increasing the total amount advanced to the Company under the Credit Agreement to $10,000,000. The maturity date for the term loan remains July 30, 2020 (the "Term Loan Maturity Date") or such earlier date on which the Loan Commitment Amount is terminated pursuant to the terms of the Credit Agreement.

On the Amendment Closing Date, the Company reissued the warrant to purchase 681,090 shares of the Company's common stock, par value $0.01 per share (the "Common Stock"), that was initially issued to the Agent on July 30, 2014 (the "Replacement Warrant") with an adjusted exercise price. As reissued, the Replacement Warrant is exercisable up to and including July 30, 2020 at an exercise price of $0.39 per share.

In addition, on the Amendment Closing Date, the Company issued the Agent a warrant (the "First Amendment Warrant") to purchase 576,923 shares of Common Stock. The First Amendment Warrant is exercisable up to and including February 3, 2021 at an exercise price of $0.39 per share, subject to adjustment. The Agent may exercise the First Amendment Warrant on a cashless basis at any time. In the event the Agent exercises the First Amendment Warrant on a cashless basis, the Company will not receive any proceeds. The exercise price of the First Amendment Warrant is subject to customary adjustments for stock splits, stock dividends, recapitalizations and the like.

The remaining $2,000,000 of the Loan Commitment Amount (the "Subsequent Term Loan") may be advanced to the Company upon written request to the Agent during the period beginning on the Amendment Closing Date and ending February 28, 2016 provided that (i) no default or event of default has occurred or is continuing under the Credit Agreement, (ii) the aggregate revenue recognized by the Company and any of its subsidiaries during any period of four (4) consecutive fiscal quarters ending prior to December 31, 2015, exceeds a certain dollar amount threshold and (iii) the Agent has received an executed warrant (the "Subsequent Term Loan Warrant") to purchase a number of shares of Common Stock equal to the number obtained when the amount of the Subsequent Term Loan is multiplied by 15% and the product is divided by the exercise price of such warrant. The exercise price of the Subsequent Term Loan Warrant will be equal to the lower of (a) the average closing price of the Common Stock on the previous 5 trading days before the closing date of the Subsequent Term Loan, or (b) the closing price of the Common Stock on the last trading day prior to such Subsequent Term Loan's closing date. The Subsequent Term Loan Warrant will be exercisable for a period of six years from the closing date of the Subsequent Term Loan, subject to adjustment. Upon issuance, the Agent may exercise the Subsequent Term Loan Warrant on a cashless basis at any time. In the event the Lenders exercise the Subsequent Term Loan Warrant on a cashless basis, the Company will not receive any proceeds. The exercise price of the Subsequent Term Loan Warrant is subject to customary adjustments for stock splits, stock dividends, recapitalizations and the like.

The foregoing description of the Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Amendment attached hereto as Exhibit 10.1. Readers should review such agreement for a complete understanding of the terms and conditions associated with this transaction.

Fifth Street Finance A Buy Here???

2015-02-09T09:29:00.002-05:00

Fifth Street Finance Corp. (NASDAQ:FSC) announced its financial results for the first fiscal quarter ended December 31, 2014.

First Fiscal Quarter 2015 Financial Highlights
• Net investment income for the quarter ended December 31, 2014 was $35.2 million, or $0.23 per share;

• Net asset value per share was $9.17 as of December 31, 2014;

• FSC closed $716.6 million of investments during the quarter ended December 31, 2014; and

• Declared monthly distributions of $0.06 per share beginning in March 2015 through August 2015.

This is a huge dividend cut and is leading the stock lower. I think it can be bought here. I should have opined that I saw this coming after coverage issues and Prospect Capital (PSEC) cutting their dividend. Cash is good

As of December 31, 2014, FSC had $110.6 million in cash and cash equivalents (including restricted cash), portfolio investments (at fair value) of $2.7 billion, $15.2 million of interest, dividends and fees receivable, $225.0 million of SBA debentures payable, $617.5 million of borrowings outstanding under its credit facilities, $115.0 million of unsecured convertible notes payable, $410.1 million of unsecured notes payable, $22.2 million of secured borrowings and unfunded commitments of $350.8 million.

As of September 30, 2014, FSC had $109.0 million in cash and cash equivalents (including restricted cash), portfolio investments (at fair value) of $2.5 billion, $15.2 million of interest, dividends and fees receivable, $225.0 million of SBA debentures payable, $317.4 million of borrowings outstanding under its credit facilities, $115.0 million of unsecured convertible notes payable, $409.9 million of unsecured notes payable, $84.8 million of secured borrowings and unfunded commitments of $325.0 million.